12th May 2022 16:12
12 May 2022
First quarter 2022 financial results |
Improved operating results on stronger benchmark margins, despite negative impact from energy crisis and the Elefsina T/A
|
HELLENIC PETROLEUM Holdings S.A. announced its 1Q22 consolidated financial results, with Adjusted EBITDA at €99m (+54%) and Adjusted Net Income at €4m.
The positive results reflect mainly the improved performance of Refining, Supply & Trading, on the back of stronger benchmark refining margins and increased domestic market fuel demand, which offset the negative impact of the energy crisis on operating costs. Refining production amounted to 3.1m MT (-16% vs 1Q21), as Elefsina refinery underwent a full Turnaround, which was safely and successfully completed in the beginning of 2Q22. Sales volumes amounted to 3.3m MT (-4%), on increased trading, which partially offset reduced production. Demand recovery across all our markets, which was affected by mobility restriction measures during 1Q21, led to an increase in volumes and contribution for both Domestic and International Marketing.
Reported EBITDA amounted to €501m, with Reported Net Income at €347m, benefiting from inventory valuation gains on the back of the rise in international oil prices, as well as the IFRS accounting treatment of EUAs, which is expected to reverse in the coming quarters.
Developments in Ukraine and market implications
Russia's invasion of Ukraine has exacerbated the energy crisis in Europe, with a further increase in natural gas and electricity prices, negatively impacting consumers and industry. In addition, it affected the supply of crude oil and oil products, mainly diesel, in the region, as Russia accounted for about 25% of European imports of crude oil and 50% of the area's diesel shortage. Russian crude oil share of Greece's imports was around 10-15%. The gradual imposition of sanctions by the EU and the potential oil embargo, have led most European refineries to reduce or even suspend imports of Russian crude oil and oil products, resulting in a demand-supply imbalance. Those developments contributed to the significant rise in crude oil prices, exceeding $100/barrel since March, with increased volatility, while product cracks, mainly diesel, were positively affected, leading to an increase in benchmark refining margins.
Strategy Implementation - Vision 2025
During 1Q22, the construction of the 204 MW photovoltaic park in Kozani, N. Greece, the largest bi-facial PV park in Europe, was completed, with the commercial operation starting in 2Q22. The Group upgraded the medium-term target for an operating capacity of 1 GW by the end of 2026 and over 2 GW by 2030.
The sale of DEPA Infrastructure (65% HRADF - 35% HELLENIC PETROLEUM Holdings) to Italgas for €733m, corresponding to €256m for the participation of HELLENIC PETROLEUM Holdings, is expected to be completed in the second quarter of 2022, following the relevant regulatory approvals.
Regarding Exploration & Production, the Group completed on March 3, 2022 the execution of 1,600 km of 2D seismic survey in the offshore block "Ionian", where it holds rights (100%) for an area of 6,700 sq. km.
Recovery of crude oil prices to the highest levels since 2014, strengthening of international refining margins
International crude oil prices increased in 1Q22 compared with the respective quarter in 2021, due to the recovery of economic activity, easing of mobility restrictions and reduced crude supply, following Russia's invasion in Ukraine. As a result, Brent prices in 1Q22 averaged $102/bbl, an 8-year high, compared to $61/bbl in 1Q21.
The dollar strengthened against the euro, on the back of the central banks' monetary policy, averaging 1.12 in 1Q22 vs 1.21 in the respective period last year.
In 1Q22 diesel cracks recovered significantly, leading to improved Hydrocracking and FCC benchmark margins, at $6.7/bbl and $3.6/bbl respectively.
Increased demand in the domestic fuel market
Total ground fuels demand in the domestic market was 16% higher, reaching 1.7m MT, while the consumption of auto-fuels increased by 17% y-o-y in 1Q22, as a result of the lifting of mobility restrictions due to the COVID-19 pandemic and increased economic activity. Heating gasoil demand was also higher (+15% y-o-y), due to weather conditions. Aviation fuels consumption increased significantly by 160%, on increased air traffic and bunkering fuels demand was 4% higher.
Balance sheet and capital expenditure
Net financial costs recorded a decrease of 1% in the first quarter of 2022, compared to the same period last year, at €24m. Net Debt amounted to €2.3bn, higher compared to the previous quarter, as the escalation of international oil prices due to the Ukrainian crisis led to an increase in working capital requirements. The Group has a strong balance sheet and sufficient credit lines to finance the additional needs.
Capital expenditure amounted to €84m, higher compared to the first quarter of 2021, due to the full turnaround of the Elefsina refinery, as well as the new acquisition of 16 MW PV projects in Viotia.
Andreas Shiamishis, Group CEO, commented on the results:
"In 1Q22, the energy crisis deteriorated, with further price increases of natural gas and electricity for consumers and industry. In the fuels market, Russia's invasion of Ukraine resulted in significant changes, especially in our region, where Russian crude and oil products account for a significant part of the supply. Our Group immediately secured alternative raw material sources, without affecting the operation of our units and the continuous market supply, while taking advantage of the refineries' flexibility to process various types of crude oil and good co-operation with other producing countries.
In terms of financial results, stronger benchmark refining margins, combined with the recovery of the domestic market demand, resulted in satisfactory operating profitability across all our business activities, especially those export-oriented, as well as our international markets.
Regarding RES, the 204MW PV park in Kozani, the largest producing RES project in Greece, was completed on time and started commercial operation. We are in the process of expanding our portfolio, developing an important additional activity for the Group."
Key highlights and contribution for each of the main business units in 1Q22 were:
REFINING, SUPPLY & TRADING
- Refining, Supply & Trading 1Q22 Adjusted EBITDA came in at €44m (vs €9m in 1Q21).
- Realized HELPE System margin amounted to $9.0/bbl, with significant overperformance vs benchmarks, vs $6.8/bbl in 1Q21.
PETROCHEMICALS
- 1Q22 Adjusted EBITDA came in at €28m, as normalization of global PP balances vs market deficit in 1Q21 led to lower international benchmark PP margins.
MARKETING
- Domestic Marketing exhibited improved performance on higher sales volume (+20% y-o-y), as demand recovered. Adjusted EBITDA came in at €18m.
- In International Marketing, demand recovery across our markets and the higher number of petrol stations resulted in increased sales volume (+32% vs 1Q21) and improved profitability, with Adjusted EBITDA at €13m.
RENEWABLES
- Higher RES operational capacity, due to the contribution of the wind farms in South Evia, led to increased electricity generation (43 GWh vs 10 GWh in 1Q21), with Adjusted EBITDA increasing to €3m vs €1m in 1Q21.
- Following the completion of the 204 MW Kozani PV project in the beginning of 2Q22, the total operating capacity reached 285 MW.
ASSOCIATE COMPANIES
- DEPA companies' contribution to 1Q22 consolidated Net Income was €5m.
- Elpedison 1Q22 EBITDA came in at €46mn, with improved electricity demand and higher production of Elpedison plants.
HELLENIC PETROLEUM GROUP OF COMPANIES
Key consolidated financial indicators (prepared in accordance with IFRS)
for 1Q22 are shown below:
€ million | 1Q21 | 1Q22 | % Δ | ||
P&L figures |
| ||||
Refining Sales Volumes ('000 MT) | 3,403 | 3,292 | -3% | ||
Sales | 1,722 | 2,803 | 63% | ||
EBITDA | 258 | 501 | 94% | ||
Adjusted EBITDA 1 | 64 | 99 | 54% | ||
Net Income | 153 | 347 | - | ||
Adjusted Net Income 1 | 5 | 4 | -28% | ||
Balance Sheet Items |
|
|
| ||
Capital Employed | 4,183 | 4,791 | 15% | ||
Net Debt | 2,244 | 2,331 | 4% | ||
Debt Gearing | 54% | 49% | -9% | ||
Note 1: Calculated as Reported adjusted for inventory effects and other non-operating items, as well as the IFRS accounting treatment of the EUAs deficit.
Further information:
N. Katsenos, Head of IR
Tel.: +30 210-6302305
Email: [email protected]
Group Consolidated statement of financial position
| As at | ||
| Note | 31 March 2022 | 31 December 2021 |
ASSETS |
| ||
Non-current assets |
|
|
|
Property, plant and equipment | 10 | 3.479.368 | 3.484.805 |
Right-of-use assets | 11 | 223.497 | 228.375 |
Intangible assets | 12 | 263.203 | 228.659 |
Investments in associates and joint ventures | 7 | 339.931 | 313.723 |
Deferred income tax assets | 91.602 | 75.702 | |
Investment in equity instruments | 3 | 489 | 504 |
Loans, advances and long term assets | 67.277 | 73.910 | |
4.465.367 | 4.405.678 | ||
Current assets |
| ||
Inventories | 13 | 1.643.889 | 1.379.135 |
Trade and other receivables | 14 | 754.156 | 694.606 |
Income tax receivables | 16.354 | 16.479 | |
Derivative financial instruments | 3 | 7.724 | 92.143 |
Cash and cash equivalents | 15 | 869.165 | 1.052.618 |
3.291.288 | 3.234.981 | ||
Assets held for sale | 193.993 | 191.577 | |
Total assets |
| 7.950.648 | 7.832.236 |
EQUITY |
| ||
Share capital and share premium | 16 | 1.020.081 | 1.020.081 |
Reserves | 17 | 236.472 | 249.104 |
Retained Earnings | 1.138.223 | 795.468 | |
Equity attributable to equity holders of the parent |
| 2.394.776 | 2.064.653 |
Non-controlling interests |
| 65.816 | 64.402 |
|
| ||
Total equity |
| 2.460.592 | 2.129.055 |
LIABILITIES |
| ||
Non-current liabilities |
| ||
Interest bearing loans & borrowings | 18 | 1.667.853 | 1.516.531 |
Lease liabilities | 168.727 | 172.296 | |
Deferred income tax liabilities | 167.678 | 89.478 | |
Retirement benefit obligations | 211.302 | 210.736 | |
Derivative financial instruments | 283 | 860 | |
Provisions | 27.559 | 26.959 | |
Other non-current liabilities | 27.450 | 27.801 | |
2.270.852 | 2.044.661 | ||
Current liabilities |
| ||
Trade and other payables | 19 | 1.605.566 | 2.146.559 |
Derivative financial instruments | 21.110 | 2.214 | |
Income tax payable | 30.701 | 4.488 | |
Interest bearing loans & borrowings | 18 | 1.532.361 | 1.474.493 |
Lease liabilities | 28.199 | 29.499 | |
Dividends payable | 1.267 | 1.267 | |
3.219.204 | 3.658.520 | ||
Total liabilities |
| 5.490.056 | 5.703.181 |
Total equity and liabilities |
| 7.950.648 | 7.832.236 |
Group Consolidated statement of comprehensive income
| For the three month period ended | ||
| Note | 31 March 2022 | 31 March 2021 |
|
|
|
|
Revenue from contracts with customers | 4 | 2.802.935 | 1.722.327 |
|
|
|
|
Cost of sales | (2.258.207) | (1.425.522) | |
Gross profit / (loss) |
| 544.728 | 296.805 |
Selling and distribution expenses | (82.388) | (70.690) | |
Administrative expenses | (36.650) | (31.459) | |
Exploration and development expenses | (6.375) | (861) | |
Other operating income and other gains | 5 | 5.191 | 6.058 |
Other operating expense and other losses | 5 | (4.678) | (4.041) |
Operating profit /(loss) |
| 419.828 | 195.812 |
Finance income | 539 | 723 | |
Finance expense | (24.554) | (24.904) | |
Finance expense - lease finance cost | (2.362) | (2.550) | |
Currency exchange gain / (loss) | 6 | (4.270) | 5.162 |
Share of profit / (loss) of investments in associates and joint ventures | 7 | 46.352 | 19.687 |
Profit / (loss) before income tax |
| 435.533 | 193.930 |
Income tax credit / (expense) | 8 | (88.902) | (41.156) |
Profit / (loss) for the year |
| 346.631 | 152.774 |
|
|
|
|
Profit / (loss) attributable to: |
|
|
|
Equity holders of the parent | 345.205 | 152.464 | |
Non-controlling interests | 1.426 | 310 | |
346.631 | 152.774 | ||
Other comprehensive income / (loss): |
|
|
|
Other comprehensive income / (loss) that will not be reclassified to profit or loss (net of tax): |
|
|
|
Share of other comprehensive income / (loss) of associates | 17 | (17.727) | 24 |
Changes in the fair value of equity instruments | 17 | (16) | (41) |
Net other comprehensive income / (loss) that will not be reclassified to profit or loss (net of tax): |
| (17.743) | (17) |
Other comprehensive income / (loss) that may be reclassified subsequently to profit or loss (net of tax): |
| ||
Recycling of (gains) / losses on hedges through comprehensive income | 17 | - | (23.988) |
Fair value gains / (losses) on cash flow hedges | 17 | 5.266 | 24.637 |
Currency translation differences and other movements | 17 | (167) | 75 |
Net other comprehensive income / (loss) that may be reclassified subsequently to profit or loss (net of tax): |
| 5.099 | 724 |
|
| ||
Other comprehensive income / (loss) for the period, net of tax |
| (12.644) | 707 |
Total comprehensive income / (loss) for the period |
| 333.987 | 153.481 |
Total comprehensive income / (loss) attributable to: |
| ||
Equity holders of the parent | 332.573 | 153.173 | |
Non-controlling interests | 1.414 | 325 | |
333.987 | 153.498 | ||
Basic and diluted earnings / (losses) per share(expressed in Euro per share) | 9 | 1,13 | 0,50 |
Group Consolidated statement of cash flows
| For the three month period ended | ||
| Note | 31 March 2022 | 31 March 2021 |
Cash flows from operating activities |
|
|
|
Cash generated from / (used in) operations | 20 | (278.333) | (518.426) |
Income tax received / (paid) |
| (2.148) | 390 |
Net cash generated from / (used in) operating activities |
| (280.480) | (518.037) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment & intangible assets | 10,12 | (84.009) | (39.830) |
Proceeds from disposal of property, plant and equipment & intangible assets |
| 22 | 133 |
Share capital issue expenses | - | (4) | |
Purchase of subsidiary, net of cash acquired | 25 | 404 | - |
Grants received | - | 21 | |
Interest received |
| 539 | 723 |
Prepayments for right-of-use assets |
| (387) | (234) |
Net cash generated from / (used in) investing activities |
| (83.431) | (39.193) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Interest paid |
| (10.042) | (8.765) |
Dividends paid to shareholders of the Company | - | (5) | |
Proceeds from borrowings | 211.400 | 55.148 | |
Repayments of borrowings | (4.300) | (1.089) | |
Payment of lease liabilities - principal, net | (9.829) | (10.134) | |
Payment of lease liabilities - interest | (2.362) | (2.550) | |
Net cash generated from / (used in) financing activities |
| 184.867 | 32.605 |
|
|
|
|
Net increase / (decrease) in cash and cash equivalents |
| (179.044) | (524.625) |
|
|
|
|
Cash and cash equivalents at the beginning of the period | 15 | 1.052.618 | 1.202.900 |
Exchange gain / (loss) on cash and cash equivalents |
| (4.409) | 5.056 |
Net increase / (decrease) in cash and cash equivalents |
| (179.044) | (524.625) |
Cash and cash equivalents at end of the period | 15 | 869.165 | 683.332 |
Parent Company Statement of Financial Position
| As at | ||
| Note | 31 March 2022 | 31 December 2021 |
ASSETS |
| ||
Non-current assets |
|
|
|
Property, plant and equipment | 1.438 | 2.707.520 | |
Right-of-use assets | 11 | 10.090 | 26.547 |
Intangible assets | 170 | 1.111 | |
Investments in subsidiaries,associates and joint ventures | 7 | 1.617.370 | 933.596 |
Deferred income tax assets | 11.019 | - | |
Investment in equity instruments | 38 | 37 | |
Loans, advances and long term assets | 202.832 | 143.172 | |
1.842.957 | 3.811.983 | ||
Current assets |
| ||
Inventories | - | 1.240.774 | |
Trade and other receivables | 40.467 | 569.077 | |
Income tax receivables | - | 13.898 | |
Derivative financial instruments | - | 92.143 | |
Cash and cash equivalents | 28.876 | 843.493 | |
69.343 | 2.759.385 | ||
Assets held for sale | 122.301 | 122.301 | |
Total assets |
| 2.034.601 | 6.693.669 |
EQUITY |
| ||
Share capital and share premium | 16 | 1.020.081 | 1.020.081 |
Reserves | 17 | 260.642 | 260.642 |
Retained Earnings | 714.957 | 714.744 | |
Total equity |
| 1.995.680 | 1.995.467 |
LIABILITIES |
| ||
Non-current liabilities |
| ||
Interest bearing loans & borrowings | - | 1.149.696 | |
Lease liabilities | 8.287 | 16.532 | |
Deferred income tax liabilities | - | 60.807 | |
Retirement benefit obligations | 8.976 | 174.211 | |
Provisions | - | 22.248 | |
Other non-current liabilities | 5.219 | 11.956 | |
22.482 | 1.435.450 | ||
Current liabilities |
| ||
Trade and other payables | 13.080 | 1.901.339 | |
Derivative financial instruments | - | 2.214 | |
Income tax payable | 8 | 54 | 416 |
Interest bearing loans & borrowings | - | 1.349.300 | |
Lease liabilities | 2.038 | 8.216 | |
Dividends payable | 1.267 | 1.267 | |
16.439 | 3.262.752 | ||
Total liabilities |
| 38.921 | 4.698.202 |
Total equity and liabilities |
| 2.034.601 | 6.693.669 |
Parent Company Statement of Comprehensive Income
| For the three month period ended | ||
| Note | 31 March 2022 | 31 March 2021 |
|
|
|
|
Revenue from contracts with customers |
| 6.040 | - |
|
|
|
|
Cost of sales | (5.491) | - | |
Gross profit / (loss) |
| 549 | - |
Selling and distribution expenses | - | - | |
Administrative expenses | (1.414) | (904) | |
Exploration and development expenses | - | - | |
Other operating income and other gains | 5 | 3.686 | 424 |
Other operating expense and other losses | 5 | (3.351) | - |
Operating profit /(loss) |
| (530) | (480) |
Finance income | 1.416 | 1.025 | |
Finance expense | (504) | - | |
Finance expense - lease finance cost | (135) | (166) | |
Currency exchange gain / (loss) | - | - | |
Profit / (loss) before income tax from continuing operations |
| 246 | 378 |
Income tax credit / (expense) | 8 | (31) | (83) |
Profit / (loss) for the year from continuing operations |
| 215 | 295 |
|
|
|
|
Discontinued operations |
| ||
Profit / (loss) after tax for the year from discontinued operations | 1 | - | 136.716 |
Profit / (loss) for the period |
| 215 | 137.011 |
Total comprehensive income / (loss) for the period |
| 215 | 137.011 |
Parent Company Statement of Cash flows
| For the three month period ended | |||
| Note | 31 March 2022 | 31 March 2021 | |
|
|
|
| |
Net cash outflow due to demerger | 7 | (713.493) | - | |
|
|
|
| |
Cash flows from operating activities |
| |||
Cash generated from / (used in) operations | 20 | 6.361 | (501.338) | |
Income tax received / (paid) |
| - | - | |
Net cash generated from / (used in) operating activities |
| 6.361 | (501.338) | |
|
| |||
Cash flows from investing activities |
| |||
Participation in share capital increase of subsidiaries, associates and joint ventures | (6.450) | (1.799) | ||
Loans and advances to Group Companies | (100.800) | - | ||
Interest received |
| 650 | 1.025 | |
Net cash generated from / (used in) investing activities from discontinued operations | 1 | - | (24.217) | |
Net cash generated from / (used in) investing activities |
| (106.600) | (24.991) | |
|
| |||
Cash flows from financing activities |
| |||
Payment of lease liabilities - principal, net | (750) | (653) | ||
Payment of lease liabilities - interest | (135) | (166) | ||
Net cash generated from / (used in) financing activities from discontinued operations | 1 | - | 23.095 | |
Net cash generated from / (used in) financing activities |
| (885) | 22.276 | |
|
| |||
Net increase / (decrease) in cash and cash equivalents |
| (814.617) | (504.053) | |
|
| |||
Cash and cash equivalents at the beginning of the period |
| 843.493 | 992.748 | |
Exchange gain / (loss) on cash and cash equivalents |
| - | 5.098 | |
Net increase / (decrease) in cash and cash equivalents |
| (814.617) | (504.053) | |
Cash and cash equivalents at end of the period |
| 28.876 | 493.793 | |